Microsoft unwraps Zune for holiday season

Microsoft took the wraps off its Zune media player on Thursday, though what's underneath is largely what enthusiasts had come to expect.

The device, which the company anticipates will be ready in time for the holidays, will come in three colors and be capable, via its built-in Wi-Fi, of sharing full-length songs with other nearby Zune devices, the software giant said. As had been revealed through regulatory filings, it includes a 30GB hard drive as well as a 3-inch screen. The Zune will come in black, brown and white, but the company has declined to reveal any pricing information.

With the Zune, Microsoft is chasing Apple and its iconic music player, the iPod, which has thus far eclipsed all challengers. For Microsoft to mount a serious campaign against Apple--which has sold more than 60 million iPods in five years--the Zune has to offer compelling features that the iPod lacks, analysts say. This gets harder and harder to do with Apple's continuous upgrades of the iPod.

On Tuesday, Apple introduced a revamped 30GB video iPod that, while lacking wireless abilities or a larger screen, offers a brighter screen, longer battery life and a lower price tag ($249) than its predecessor. There had been a report last month that Microsoft was $299 for the Zune, Apple's then-price for the 30GB iPod. Microsoft declined on Thursday to detail Zune's price but said it will be revealed in coming weeks and will be competitive.

Scott Erickson, Microsoft's senior director of product management for Zune, said his device is different from the iPod, because it offers an alternative to the typical .

Zune users can send full-length tracks of select songs, homemade recordings or photos to other Zune players via the device's Wi-Fi. The shared songs can be heard up to three times over three days. Should a user like a song a friend has shared, the song can be flagged and later can be purchased from the Zune Marketplace. Not every song will be available to swap however, Erickson said. Artists can opt out, but fans will have access to the vast majority of titles, he added.

"We want to build community around new bands, new artists. Today, you really can't do that. What we're offering is connection."

--Scott Erickson, senior director of Zune product management

"We want to build community around new bands, new artists," Erickson said. "Today, you really can't do that. What we're offering is connection."

That may not be enough, says Susan Kevorkian, an analyst with IDC. She gave Microsoft points for style and functionality but said the Redmond, Wash.-based company failed to go far enough in building an iPod alternative.

Zune falls short in two areas, she said: It won't be ready to offer video in time for the holidays and Zune users can't access the music service from the device itself, which will hamper people from making impulse buys, Kevorkian said.

"Zune looks good but it needs to get better and better quickly to give Apple a run for the money," Kevorkian said.

Not launching with video capability ignores growing interest in the sector. On Tuesday, Apple announced plans to make movies available for purchase through the iTunes store. Movies from four studios owned by Walt Disney will be available on iTunes 7, the new version of the download software, the same day they are released to DVD.

Microsoft recognizes the video trend, but wanted to stay focused on music for the launch of the first device.
"That's what the vast majority of people are doing online right now. Video is still really early," Erickson said.

Microsoft has said it will spend hundreds of millions of dollars on the Zune effort, but said it still expects it to take several years to make significant headway against Apple. In the meantime, Zune's software can automatically import music, pictures and videos from iTunes and Windows Media Player, however the device does not--as some had speculated--handle songs purchased from iTunes, according to Microsoft.

The software maker also hinted that the Zune will have new wireless abilities down the road. "As Zune evolves, your device can be easily updated," Microsoft said. "And with built-in wireless capability in each player, the future is filled with possibilities."

Zune will work in conjunction with a subscription music service that offers customers all the music they want for a flat fee. Although Zune is a Microsoft-designed product, the company confirmed last month that Toshiba will be making it.

Microsoft plans to launch a number of accessories, including Zune car chargers, docking stations and gear that will allow Zune to connect to televisions and music speakers. Helping Microsoft with the accessories are many of the same companies that manufacture Apple accessories, including Altec Lansing, Belkin and Digital Lifestyle Outfitters.